Dubai: The continued softness in oil prices seems to have mired Abu Dhabi’s commercial realty market, with the number of enquiries taking a hit in the first six months of the year. And where they can, prospective tenants are making do with offices of between 200-500 square metres, according to a report by Knight Frank.
Businesses in the oil and gas sector have naturally been keeping a low profile under the circumstances, and so have entities that rely heavily on government led spending to go in for a higher profile.
But there could be some sectors which can fill this breach. In Knight Frank’s projections, there were instances of more enquiries from the engineering and construction sector. Their belief is to be there when Abu Dhabi ramps up on its infrastructure construction activity.
“The average size requirement for this sector remained steady at around 600 square metres,” the consultancy reports. “This is larger than most other sectors and is being driven by international companies’ requirements for office space. Combined, the leisure/hospitality and professional sectors accounted for 30 per cent of total demand in the first six months of this year.”
And what of the rents? “Over the next twelve months, rents are likely to see upward pressure as little prime or grade A new office supply is due to be delivered to market,” according to the consultancy. “Prime office rents edged up in Abu Dhabi in the first six months of this year to Dh1,900 per square metre.
“Meanwhile, rental values for Grade A shell-and-core office space remained steady at Dh1,400 per square metre.
“With the exception of one or two developments, there is a shortage of prime/grade A office space available which meets occupiers’ needs in Abu Dhabi.”